On 4 May the European Parliament approved the e-commerce directive, the second and final major political hurdle in the European Union's legislative process. The directive will now need to be adopted by the Council, and EU member states will have 18 months to convert it into national law.
The adoption of the proposed directive by the European Parliament constitutes a major step forward in the creation of an EU regulatory regime for e-commerce in the EU. The directive should facilitate agreements on other EU policies involving e-commerce such as copyright rules, distance selling of financial services and revision of the Brussels Convention.
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The directive deals only with what is necessary for the internal market ,and clarifies and ensures effective enforcement of existing primary EU law and national legislation rather than imposing new rules.
It establishes a light and flexible framework for the approximation of member states' legislation to the new medium of e-commerce. The directive also promotes the role of interested parties through self-regulation.
This clause establishes that control of the service provider should fall within the competence of the member state where it is established. In effect, this means that if a provider of e-commerce services complies with the law of this country, it need not comply with the differing laws of the 14 other member states.
The directive also removes uncertainty by defining a place of establishment for an information-site service provider. It prohibits prior-authorisation regimes specifically targeted at online activities.
In the field of commercial communications, the directive establishes transparency requirements to protect consumers.
It also requires an adjustment of national legislation to ensure that contracts can be concluded online - many jurisdictions require that contracts should be written on paper.
E-commerce service providers will be required to make available certain types of information to consumers and business customers regarding online contracts. So the legal insecurity over when a contract has been concluded is dispelled.
With ISPs, the directive establishes a mere-conduit exception and provides for a limitation of liability for cacheing and storage, providing certain conditions are met. It also prevents member states imposing general obligations on ISPs to monitor third-party information.
The directive encourages codes of conduct at EU level, facilitates and encourages alternative dispute-resolution systems, and provides for better legal redress appropriate to the online environment, while establishing a provision for quick and efficient administrative co-operation between the regulatory authorities in member states.
By creating the high level of legal certainty required for investment in the sector, and enhancing consumer trust and confidence, the directive seeks to balance the different interests of the internal market against general interests and a high level of consumer protection.